Heather Hopkins, Research director, Platforum
Welcome to the first in a new series of workplace proposition profiles researched by Platforum. Each month we will be taking a close look at a provider’s proposition – and working alphabetically means Aegon is first under the microscope.
Aegon’s WARC (Workplace Aegon Retirement Choices) proposition is famous for its slick front end, Retiready. The firm focuses on helping scheme members ‘to and through’ retirement, offering a single platform that can help in both accumulation and decumulation.
Aegon’s platform launched in 2012 and has nearly 750 workplace schemes with 47,500 employees within them. The firm says nearly half of employees have already registered for Retiready, which launched earlier this year, and 70 per cent of members of new schemes use the service.
Retiready is a digital service designed to engage with employees in workplace schemes. It allows them to view and manage all of their workplace savings in one place and includes calculators to help them work out how ready they are for retirement. Customers can also use the service to buy additional savings products such as Isas and to transfer retirement savings held elsewhere into the account.
Last month we published our 2015 Workplace Savings Guide, which comprises data from a survey and in-depth telephone interviews with financial advisers, employee benefits consultants and employers.
The research found that respondents deemed the most important feature in a workplace savings plan to be ease of use for employees, beating fees. Employers cited fees as their top priority but also saw ease of use for employees as a critical factor.
Retiready therefore ticks an important box for corporate advisers, EBCs and employers. Aegon hopes it will drive employee engagement, resulting in better outcomes for scheme members.
With the commission ban post–RDR, many of the face-to-face seminars once offered in the workplace have ended. In our conversations with employers, several raised concerns about who would have responsibility for retirement education in workplace savings.
Aegon’s digital proposition makes a strong play to drive engagement and educate scheme members about retirement savings.
Aegon’s target market is SMEs. It caters to plans with more than five lives and less than 1,000.
Aegon has a reputation for being choosy. Several advisers we spoke to said there had been schemes they had brought to Aegon that were not accepted. Advisers were unsure of the reasons why the plans had been rejected and could not detect a pattern in the decisions.
We also hear from advisers that Aegon can be an expensive option for SMEs staging auto-enrolment, particularly when compared against other players targeting SMEs.
Aegon’s offering looks attractive for the segment it aims to serve but is unlikely to be able to compete for business from the small firms currently staging, unless the firms in question are willing to pay for the added value that Retiready offers.
We think Aegon is likely to win business from firms that employ relatively well-remunerated individuals who are engaged with retirement savings.
Aegon has made a big play to unify workplace savings with wealth management. In the face of a commission ban and the pension reforms, its proposition looks compelling.